International
Monetary Fund strongly suggests countries tax the rich to fix
deficit
Tax the rich and better target the multinationals: The
IMF has set off shockwaves this week in Washington by suggesting countries fight
budget deficits by raising taxes. Tucked inside a report on public debt, the new
tack was mostly eclipsed by worries about the US budget crisis, but did not
escape the notice of experts and nongovernmental organizations (NGOs).
Fitch
warns it may cut U.S. credit rating from AAA
Fitch Ratings
warned on Tuesday it could cut the sovereign credit rating of the United States
from AAA, citing the political brinkmanship over raising the federal debt
ceiling. “Although Fitch continues to believe that the debt ceiling will be
raised soon, the political brinkmanship and reduced financing flexibility could
increase the risk of a U.S. default,” the firm said in a statement.
US debt
ceiling: Senate takes over as House plans fail
Frantic US
political attempts to avert a federal debt default have pivoted back to the
Senate after plans in the House of Representatives collapsed. Upper chamber
leaders resumed work overnight on a deal to raise the US borrowing limit and end
a partial government shutdown.
Reserve Balance Sheet Soon To Hit $4 Trillion in Assets
It is
going to be interesting to see exactly what happens with the Federal Reserve’s
balance sheet under Janet Yellen. We do not yet have the full details of a
compromise for the debt ceiling, but it seems obvious that a resolution is going
to be found that will reopen the federal government and which will allow the
United States to pay its bills. The reality is that the Federal Reserve’s
balance sheet is getting closer and closer to having $4 trillion worth of
assets. It also now seems more than possible that quantitative easing will go on
much longer than expected even just a month ago.
Europe’s Banks Are STILL Totally Insolvent…
Nobody knows the
true scale of potential losses at Europe’s banks, but the International Monetary
Fund hinted at the enormity of the problem this month, saying that Spanish and
Italian banks face 230 billion euros ($310 billion) of losses alone on credit to
companies in the next two years.